Do Your Research Before You Invest In Crypto
Youre taking a risk when investing in an asset like cryptocurrency. There is much more to consider than normal stocks, so you need to learn everything you can when investing in crypto.
The guide above is the best place to start when you start your investing journey. Make sure you read it and understand everything before you buy crypto in the future.
Read more posts on the blog if you want to learn more tips that will help you make better investments.
Approximately 16% Of Americans Use Cryptocurrency
According to Pew Research, approximately 16% of Americans use cryptocurrency in some shape, form or fashion. How many people use cryptocurrency in the U.S., then? About 53 million people.
How many people own cryptocurrency? IRS tax returns will show the best indication of this figure, but it is likely a similar amount. 5
As Of January 2021 The Confidence In Cryptocurrency Is Almost 100%
The cryptocurrency market has gained so much fame and acceptance in the past years.
In fact, there has been a massive institutional and retail interest in Bitcoin and Etherium by many investors over the years. This dramatically increased in the last quarter of 2020.
In 2021 a survey about cryptocurrency confidence was carried out on more than 60,000 users worldwide.
The result showed that 97% of these users have confidence in cryptocurrency, as they confessed their faith in digital assets.
The statistics also showed that more than half of these cryptocurrency users consider venturing into crypto investment as a source of income.
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Why Does It Seem Like Everyone Is Investing Then
The reason why it seems like a lot more people invest in cryptocurrency is due to the press surrounding it. Words are powerful, and we now read more of them than ever before.
Cryptocurrency is a very novel development, and that makes it a newsworthy item. News groups love being on the cutting edge of tech, and that gave crypto a lot of clout.
Additionally, it’s important to remember that crypto is an internet-based phenomenon. Since it started on the internet, it’s way easier to find netizens talking about it.
As Of February 2021 There Were 68 Million Cryptocurrency Wallet Users
A wallet is like a digital wallet or bank account where cryptocurrency traders store their personal data. These digital wallets can hold and store several types of cryptocurrencies.
As of the fourth quarter in 2020, about 63 million wallets were already owned. In the first quarter of 2021, this number increased by 3 million.
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Here’s How Many People Are Invested In Crypto
According to Survey Monkey, 11% of people within the United States have put some of their money into cryptocurrency.
While this is a big percentage of investors, not every demographic group is equally excited about buying virtual coins. For example, crypto investing is more popular with men than it is with women. A total of 16% of men have crypto investments in their portfolios compared with just 7% of female investors.
Young and middle-aged investors are also more likely to have embraced this new asset class. Among investors between the ages of 18 and 34, 15% of people have invested money in cryptocurrency. This drops to 11% of investors between the ages of 35 and 64. And just 4% of investors aged 65 and over have purchased crypto investments.
This isn’t surprising, as younger investors are more likely to be exposed to crypto through social media and are often more technologically advanced than older investors. This helps them to better navigate the process of buying virtual coins.
Among those who invest, the reasons for putting cash into crypto are similar to the reasons for buying any other assets. Most people believe virtual coins could provide the opportunity for long-term growth. Close to half of crypto investors also believe that there is a strong potential for high growth within a short period of time.
Cryptocurrencies From A Closer Perspective
More than 100 million active users such numbers can boast India. Interestingly, the policy of this country is not unequivocal on the issue of trading and owning crypto assets. This, however, does not deter residents from buying them. The other places on the podium are occupied by the United States and Russia .
However, to get a real picture of the market, it is worth checking what percentage of the population of each country owns cryptocurrencies. Here the situation looks equally interesting.
As you can see, the fastest growing adoption in the world boasts Ukraine, where as much as 12.73% of citizens own crypto. It is followed by Russia , and Venezuela . The United States in this list was on the sixth place . India, on the other hand, which was the leader in terms of population, was ranked seventh .
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Why Do People Use Cryptocurrency
Lets take a look at some of the main reasons people are attracted to cryptocurrencies:
- Cryptocurrency transactions are faster.
Cryptocurrencies are transferred almost instantaneously from sender to receiver because there are no intermediaries to cause delays and no institutions to give their approval. Some cryptocurrencies are so scalable that they can process up to 3,000 transactions per second.
- Cryptocurrency transactions are cheaper.
Financial institutions typically charge hefty fees on their services, especially when it comes to international payments. Crypto transactions, on the other hand, only incur a small network fee for the miner.
- More privacy and security.
When youre making a money transfer using cryptocurrency, the transaction is stored on the blockchain and anyone can see it online. However, instead of your full name, the transaction shows an encrypted address called a public key. To sign the transactions and manage your balance you use a unique private key.
- Theres no risk of inflation.
Most of the cryptocurrencies are hard-capped to create scarcity and protect them from inflation scenarios, unlike the unlimited supply of fiat currencies.
Housing Market Crashes Aren’t As Common As Many People Think But If A Crash Does Happen You Can Rest Easy Knowing These Three Things
Aside from the Great Recession, the last major housing crash was in the 1930s and 1940s during World War II. Crashes are far less common than many think, but the recent scar of the Great Recession has left many worried that we are in a housing bubble after several years of record growth in home prices.
As housing data continues to roll in, it’s becoming blatantly clear that the real estate market is cooling down. The verdict is still out as to whether or not a housing market crash will follow, but those who are concerned can rest easy knowing these three things.
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Cryptocurrency Users Statistics And Cryptocurrency Demographics
Have a look at the following statistics on cryptocurrency users and demographics. You might find the crypto world becoming far more mainstream than you thought.
In just two years, the number of individuals holding at least one cryptocurrency in a Blockchain wallet has nearly doubled from 40m to 70m. Will this growth continue?
A Growing Number Of Tech And Financial Experts Are Issuing Warnings About Cryptocurrency Investments What Will Their Cries Mean
Maybe it was when the author of the influential book Black Swan said bitcoin was worth exactly zero.
Perhaps it was the assessment from a billionaire hedge-fund manager that cryptocurrencies are a limited supply of nothing.
Or it could just be one of those cultural shifts that happens when one too many celebrities tries to convince us of something.
Whatever the turning point, a growing group is sounding dire warnings about the dangers of cryptocurrency investment. Call them the crypto-catastrophists bloggers and billionaires, mathematicians and economists, computer-scientists and 2008-crisis prophets and, even, a 2000s-era Hollywood personality who have all come together to unleash a warning to government and citizens about cryptocurrency investment. And their voices have, slowly, begun to rise above cryptos evangelist din.
For a long time it felt like just a few of us shouting from the rooftops, said Nicholas Weaver, a computer-security expert from the University of California at Berkeley, who has long mounted both a financial and ethical case against crypto investment. But I think there are more of us now, and hopefully that will help us be heard.
On Wednesday, Weaver was one of 26 influential technology personalities to direct those cries to Congress.
The alert goes further than a warning James issued last year, which focused more sharply on explicit crypto scams.
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Greyscales Bitcoin Investment Trust
Founded in 2013, Greyscales Bitcoin Investment Trust has become a leader in the cryptocurrency industry. In becoming a trusted name in a rapidly growing sector, Greyscale emphasized democratizing Bitcoin for the masses. While Bitcoin is already decentralized, Greyscale gives more people more access to the up-and-coming digital currency. More specifically, Greyscale is an investment platform on the capital market that builds transparent, familiar investment vehicles for a growing asset class with unlimited upside.
Greyscale owes its current success to making Bitcoin more accessible to everyone. In fact, Greyscale helped bridge the gap between the informed and the uninformed. To do so, Greyscale made it easier than ever to invest in Bitcoin. For example, Greyscale allows investors to hold Bitcoin in certain IRA, Roth IRA, and other brokerage and investor accounts.
Find An Investing Platform
Once you know what coin you want and have your trading strategy, youre ready to take the next step and buy your cryptocurrency. However, you cant just sign up for a stock trading app to find all the coins. You need to sign up for an investment platform.
Many cryptocurrency platforms are available, but not all are well known. Try to stick with the established players when you start to avoid falling for scams.
Once you sign up for an account, you can find price information for the coins you want to buy. Deposit your money and put an order for the cryptocurrency youre buying.
Of course, the leading platforms may not have smaller coins that havent established themselves yet. You will need to sign up for smaller platforms to access those coins. Just be careful what information you provide.
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How To Determine If Crypto Is Right For You
To be sure, you shouldnât rush into any investment just because it is relatively cheap, experts say.
If buying crypto doesnât fit your long-term financial goals, you shouldnât purchase it just because itâs trading at a relative discount, according to Ivory Johnson, a certified financial planner and founder of Delancey Wealth Management in Washington, D.C.
âIf your time horizon is 10 years, I think now is a fine time to buy it,â he said. Otherwise, he recommends that investors take a more holistic approach to the asset instead of trying to time a volatile market.
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Investors should have a clear goal for buying crypto instead of being pulled in only because the price dropped, he said. Reasons include seeing the asset as a store of value, viewing it as uncorrelated to stocks or wanting to own it because of the increasing rate of adoption.
Before buying, people should be conscious of how much of their total portfolio is invested in cryptocurrencies and make sure the allocation matches their risk profile, Johnson said. New investors should have a firm grasp on how much theyâre willing to risk before they buy.
âIf you put 20% in crypto and you canât stomach volatility, youâve got whatâs known as a problem,â he said. âBut if youâve got 1% or 2% or 3%, itâs not as big of a hit to your portfolio.â
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Learn Your Tax Implications
You cant profit from cryptocurrency and not pay taxes anymore. Now that crypto is mainstream, governments want their cut of profits made in the market.
Unfortunately, learning how to handle taxes with cryptocurrency earnings isnt well-documented. Do your best to learn how to handle taxes based on your governments rules.
There are several software programs that will help you with the process. You can export your exchange transactions into these programs, and theyll tell you what you owe the government.
If you dont feel comfortable doing this yourself, youll need to reach out to a tax professional. There are now many accountants experienced with cryptocurrency taxes who can help.
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As Of The Fourth Quarter Of 2020 Coinbase Had About 43 Million Users
Coinbase is one of the most popular and dominant cryptocurrency exchanges in the world. In 2021, the company filed because it had generated a good amount of revenue in 2020.
It made about $1.4 billion in revenue as of 2020, a double-digit growth compared to $480 million, which the company made in 2019.
Its net profit that same year, according to cryptocurrency exchange statistics, was $322 million net.
How Many Daily Users Of Bitcoin
This section discusses on-chain Bitcoin users. It does not include transactions taking place on exchanges or centralized services.
The Bitcoin network processes more than 270,000 transactions per day.
This number is deceiving, since one transaction can have multiple recipients.
There are only between 400,000 and 800,000 active addresses per day. This means there are, likely, 300,000 – 500,000 unique users either sending or receiving Bitcoin per day. The chart below shows that going in to 2022 the monthly active addresses is around 30 million.
In March of 2021, daily active addresses dropped to around 720,000 active addresses.
This is all despite a rising price, indicating that people are not moving funds around and are perhaps choosing to hold their positions to acquire deeper gains.
Note: Many people use Bitcoin daily by saving. A user who has money parked in Bitcoin is “using” it for investing or saving, but isn’t necessarily making transactions every day. This is why we also have to look at the number of bitcoins in .
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The Libra Was Speculated To Be Backed By The Us Dollar On A Ratio Of : 1 When Launched In 2021
Cryptocurrency facts stated Facebooks virtual money called Libra would be launched as a single coin in 2021.
Facebook already built a blockchain to support the creation of Libra in terms of verifiability and security.
The strategy the company planned to use for their virtual money was to peg it to fiat. However, the US dollar will only support Libra by 50% due to several regulatory hurdles.
When To Sell Bitcoin
Traditional wisdom says you should buy low and sell high. But whether you should sell bitcoin depends on your investment horizon, risk appetite and financial goals. Although some website speculate that certain days of the week are better or worse then others for selling bitcoin, we believe that any decision to buy or sell should be based on analysis of crypto fundamentals.
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How Are Cryptocurrencies Taxed
Cryptocurrencies got dealt a raw hand by the IRS in 2014 when the agency issued Notice 2014-21, 2014-16, I.R.B. 938. This ruling explained that virtual currencies, better known as cryptocurrencies, get treated as property in the eyes of the IRS.
Possible transactions for your cryptocurrencies include:
- The receipt or transfer of crypto for free, including from an air-drop or a hard fork
- Cryptocurrency exchanges for goods or services
- The sale of cryptocurrency and
- The exchange of cryptocurrency for other types of property, including for other cryptocurrencies .
When you take part in any of the above crypto transactions, you generally experience tax consequences. Depending on the action taken, you may generate tax liability for yourself.
Because the IRS treats cryptocurrency as a capital asset, you must track your basis in the currency and record it as a capital gain or loss at disposition. That means if you bought $100 worth of Bitcoin in January 2020 and sold it for $1,000 in February 2021, you will have a long-term capital gain of $900 .
If you buy and sell your crypto within a years time, it will count as a short-term capital gain. Likewise, if you use your cryptocurrency to facilitate a transaction, meaning you used it to pay for some goods or services as you would a U.S. dollar or other fiat currency, you would pay a similar capital gain on its use to pay.
Cryptocurrency Tax And Economic Statistics
Virtual currencies have had a major impact on the investing side of the equation, but can it make the leap into facilitating commerce globally?
Also, can it sidestep its current treatment as a capital asset in many countries, as opposed to an actual currency? This change will unlock cryptocurrencies widespread use as a fiat currency replacement.
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One Ether Was Worth $150087 As Of February 25th 2021
The crypto market is very volatile, and due to this, crypto prices are always unstable. Prices could drop one minute and go up in the next minute.
On January 25th, 2021, the price of one Ether rose by $131.78 in a single day, according to crypto stats. On February 25th price improved by $18.99 on a single day, taking the price of one Ether to $1500.87.
Bitwise 10 Private Index Fund
An investment in the Bitwise 10 Private Index Fund is an investment in the Bitwise 10 Large Cap Crypto Index. For those unfamiliar with the Bitwise 10 Large Cap Crypto Index, it tracks the return of the 10 largest cryptocurrency assets on the market. Therefore, investors who buy shares in this particular fund will be investing in the 10 largest crypto-assets, as measured and weighted by free-float market capitalization. When the assets perform well, investors will realize gains proportionate to the shares they own.
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